Mobile Phone Prices Set to Increase

Mobile Phone Prices Set to Increase as Govt Adds a New Levy on Imports

Mobile phone handsets prices will increase, as the federal government has announced a new kind of levy of up to Rs 5000 on importing mobile phone handsets.

New Levy on Imported Mobile Phones in Pakistan

The new levy is going to be applied to mobile phones depending on their import value after duties and taxes are added to the total amount. The details are as follows:

Mobile Phone Value

Levy Amount

Less than Rs. 10,000

None

Between Rs 10,000 and Rs. 40,000

Rs. 1000

Between Rs 40,000 and Rs. 80,000

Rs. 3000

Over Rs. 80,000

Rs. 5000

Reduction of Regulatory Duty on CKD/SKD Phone Kits

According to the Finance Bill, a levy of Regulatory Duty (RD) @ Rs.175/set on completely knocked down (CKD)/ semi-knocked-down (SKD) kits of a mobile phone has been proposed. The RD on completely knocked down (CKD)/ semi-knocked-down (SKD) kits of mobile phone was Rs 200 per set which has now been reduced to Rs 175 per set, reflecting a benefit of Rs 25 per set.

What is Going to be the Impact of the New Levy?

According to experts, this may discourage digitization and encourage the smuggling of mobile phones. The move came as an effort to curtail growing imports and generate additional revenue.

Industry experts said that imposing the levy on mobile phone sets will hurt the information technology sector at large. At the same time, this will also encourage smuggling of handsets as the incentive for illicit trade will be increased with the levy.

Mobile Phone Imports Continue to Grow

Mobile phone imports witnessed a phenomenal growth of 14.99 percent in the first nine months (July-March) of 2017-18 as they stood at $603.075 million compared to $524.442 million during the same period of 2016-17 (July-March).

Mobile phone imports in March 2018 stood at $77.042 million and increased by 18.41 percent compared to the $65.062 million imports in March 2017, and increased by 10.41 percent compared to $69.779 million in February 2018.